This week's world news

17 October 2011 00:00[Source: ICB]

AMERICAS

ENTERPRISE PREPARES FOR ETHANE PIPELINEUS-based natural gas processor Enterprise Products Partners has entered "a binding open commitment period" for capacity on its proposed pipeline to ship ethane from the Marcellus and Utica shale regions in Pennsylvania, West Virginia and Ohio to the US Gulf coast. The period will run from October 11 to November 10. Enterprise said it has already met with shippers willing to execute long-term contracts to support the project and that it expects ­"sufficient market support." The 1,230 mile pipeline will have an initial capacity of 125,000 bbl/day, with start-up expected early in 2014.

US NATGAS PRICE EXPECTED TO STAY FLAT FOR WINTERThere will be plenty of natural gas available for US industrial and residential consumers in the winter and prices should be flat on last winter's rates, according to The Natural Gas Supply Association (NGSA). "When we weighed and combined all the different influences on supply and demand, the big picture that emerged for the coming winter appears to be a stable outlook for natural gas ­consumers," NGSA president Skip Horvath said. The US spot price for natural gas is about $3.5/MMBtu (€2.5/MMBtu).

LYONDELLBASELL REPORTS UPSET AT US OLEFINS PLANTNetherlands-based petrochemical firm LyondellBasell reported an emissions incident at its olefins plant in Channelview, Texas, US, on October 7. A compressor trip resulted in a unit upset and ­flaring, according to the filing with the Texas Commission on Environmental Quality. The ­incident resulted in reduced unit feed rates. The company declined to comment on the incident. ­According to ICIS plants and projects, LyondellBasell has a 390,000 tonne/year butadiene (BD) unit, two 873,000 tonne/year ethylene units and a 1.5m tonne/year propylene unit at the site.

SHELL STARTS TURNAROUND AT TEXAS OLEFINS CRACKERAnglo-Dutch chemical and ­energy giant Shell shut its Deer Park olefins complex in Texas, US, for a 45-day planned maintenance turnaround on Monday, October 10, sources said. The company has an ethylene capacity of 835,000 tonnes/year of at the site. The turnaround began as US-based Formosa Plastics prepared to restart one of its Texas crackers, which had been shut down since September 1, also for planned maintenance. A Shell spokesman did not immediately respond to a request for confirmation.

BASF INVESTS IN BRAZIL, CHINA SAP PLANTSGermany-based BASF is building two superabsorbent polymers (SAP) plants in Brazil and China to exploit growth in the emerging polymers markets. BASF said one of the SAP plants will be built in Camacari, Brazil, with a 60,000 tonne/year capacity. Separately, the company's joint venture with China's Sinopec will include the construction of a second 60,000 tonne/year plant at its Verbund site in Nanjing. The Camacari plant is expected to start production in late 2014, and the Nanjing plant at the beginning of 2014.

ASIA

NATUREWORKS TO BUILD PLA PLANT IN THAILANDUS-based polylactic acid (PLA) manufacturer NatureWorks said it will invest in a new plant in Thailand, following Thailand-based PTT Chemical's purchase of a 50% stake in the company from US-based agribusiness Cargill, in a deal worth $150m (€109m). NatureWorks markets its biopolymers - made from renewable plant material - under the brand-name Ingeo. "We anticipate bringing the new plant on line in 2015, and expect to announce further details on this expansion later this year," NatureWorks CEO Marc Verbruggen said. NatureWorks runs a 140,000 tonne/year PLA facility in Blair, Nebraska, US.

SAMSUNG TOTAL KEEPS DAESAN HDA UNIT SHUTSouth Korea's Samsung Total ­Petrochemicals is maintaining a shutdown at its Daesan hydrodealkylation benzene unit because of persistent negative production margins, a company source said. The company has no immediate plans to restart the 200,000 tonne/year benzene facility, as the restart will depend on the margins, he added. The unit was taken off line in the May-June period and has been shut since then.

ASAHI KASEI TO PROCURE LESS BENZENEJapan-based styrene monomer (SM) producer Asahi Kasei has slashed its purchase of feedstock benzene by about 15,000 tonnes for September and October ­because of an ongoing turnaround at its No. 3 SM unit, a company source said. The company reduced its procurement of benzene volumes to about 25,000 tonnes for September and to similar levels for October, he added. Asahi Kasei's usual monthly benzene requirement is 40,000 tonnes, with the company purchasing cargoes on a term and spot basis. The company is expected to restart its 390,000 tonne/year No. 3 SM unit in ­Mizushima from October 20.

MITSUBISHI RAYON TO DISCUSS JV WITH DAICELJapan's Mitsubishi Rayon ­Company (MRC) has entered into a non-binding letter of intent ­concerning the establishment of a joint venture with Daicel Chemical Industries, to manufacture acetate tow for cigarette filters. MRC's acetate tow manufacturing business at the Toyama production center will become a separate company, and part of the shares from this will be transferred to Daicel. MRC will have a 65% stake, while Japan-based Daicel will have the remaining 35% share. Daicel will supply ­feedstock cellulose acetate flakes for the joint venture unit, while the output will be supplied to both MRC and Daicel.

DONGMA RESTARTS FATTY ACIDS PLANT IN CHINAChina's Dongma Oils & Fats (Zhangjiagang) Company restarted its 120,000 tonne/year fatty acids plant in Zhangjiagang city, East China, on October 10, a ­company source said. The plant was shut down on September 1 as part of the company's annual maintenance plan.

BASF PETRONAS TO RESTART OXO-ALCOHOLMalaysia's BASF PETRONAS Chemicals plans to restart its ­oxo-alcohol plants at Gebang industrial zone in Kuantan, Pahang state, on November 3, a company source said. The producer shut its 160,000 tonne/year butanol plant, 80,000 tonne/year 2-ethylhexanol (2-EH) unit, 40,000 tonne/year phthalic anhydride (PA) unit and 100,000 tonne/year plasticizer plant on October 7. As a result of the shutdown, BASF PETRONAS will have less spot material ­available, particularly 2-EH, the source added.

SHEN HUA CHEMICAL TO DELAY SBR SHUTDOWNChina's Shen Hua Chemical ­Industrial is planning to delay the shutdown of its 180,000 tonne/year styrene butadiene rubber (SBR) plant at Nantong, in Jiangsu province, to October 16, an industry source said. The company originally scheduled the plant to shut on October 12 for three weeks of maintenance. The firm operates three lines at the SBR unit, with two lines producing oil-extended SBR 1712 and one producing non-oil SBR 1502, ­according to the source.

CSPC RESTARTS HUIZHOU CRACKER AFTER OUTAGEChina's CNOOC and Shell ­Petrochemicals Company (CSPC) restarted its 950,000 tonne/year naphtha cracker at Huizhou, in Guangdong province, around October 8-9, following an outage in late September, market sources said. Officials could not be reached for comment. CSPC took the plant offline on September 26 because of technical issues, and subsequently shut its derivative operations, the sources added. In addition to restarting the cracker, the company has resumed operations at its downstream facilities, which include a 320,000 tonne/year propylene oxide (PO) plant, a 200,000 tonne/year polyether polyol plant and a 60,000 tonne/year monopropylene glycol (MPG) unit.

KEYUAN COMPLETES SBS PLANT CONSTRUCTIONKeyuan Petrochemicals has completed construction of a 70,000 tonne/year styrene-butadiene-styrene (SBS) plant in Ningbo, Zhejiang province. The Chinese firm said it expects commercial production at the plant to begin by the end of 2011. "[The plant] will conduct trial production runs in October and November before commercial production begins," the company added.

EUROPE

EVONIK INDUSTRIES PLANS UP TO €500M IN DEBT CUTSGermany-based chemical firm Evonik Industries plans to cut its debt by up to €500m ($686m) as it seeks to improve its financial structure. Evonik said it is aiming for an early buy-back of up to €500m of its 10-year "Evonik ­Degussa" bonds. These have a total value of €1.25bn and an interest rate of 5.125%, with maturity in December 2013. Degussa is the former name of Evonik ­Industries' chemical arm. Evonik's chief financial officer, Wolfgang Colberg, said: "We have materially strengthened our financial profile over the past few years, and this partial bond ­buyback is another milestone on this route."

ARKEMA REAFFIRMS €1BN EARNINGS TARGETFrench chemical group Arkema said on Tuesday, October 11, it is still confident it will achieve the €1bn ($1.4bn) earnings before interest, tax, depreciation and amortization (EBITDA) target for 2011 that it announced in August. "I can confirm the guidance we gave in early August," CEO Thierry Le Henaff said on the sidelines of a press event in Shanghai, China. "Market conditions are more or less the same. I feel customers are more cautious - they read the papers and see the macroeconomic statistics - but we still have solid conditions and a good level of demand." He said the first half of 2011 in China was "extraordinary," adding that "the second half is not at the same level, but is still solid." Arkema's 2010 EBITDA was €790m.

BERNSTEIN: BASF'S 2012 EARNINGS SET TO DECLINEGermany-based BASF's earnings are set to fall in 2012, following a sharp decline in the country's chemical industry for the second consecutive month, US-based investment research firm Bernstein Research said. Bernstein analysts explained that Germany's Ifo business climate survey suggests BASF's earnings in 2012 will be adversely affected by weakening orders and rising inventory levels. The firm lowered BASF's earnings per share estimate to €6.19 ($8.50) for 2011 and €6.05 for 2012 - down from €6.47 and €6.71, respectively.

REPSOL DELAYS RESTART OF PO/SM PLANTThe restart of Spain-based oil company Repsol's propylene oxide (PO)/styrene monomer (SM) facility in Tarragona, Spain, has been delayed following ­recent maintenance work, a ­company source said. Repsol's ­availability for PO, SM and derivatives - monopropylene glycol (MPG) and polyols - at the Tarragona site has been affected by the extended outage, but contracts are still being covered. However, the company source declined to ­comment on whether the ­maintenance was planned or unplanned, or to disclose precise details about its origins or possible duration. The Tarragona site's nameplate capacity for PO is 200,000 tonnes/year and 63,000 tonnes/year for MPG, according to the company. The site also produces up to 465,000 tonnes/year of SM, according to the ICIS plants and projects database.

SIBUR TO FORM TWO SYNTHETIC RUBBER JVSRussian petrochemical company SIBUR has reached an agreement with China's Sinopec to form two joint ventures to produce synthetic rubber. The two companies concluded a memorandum of extended cooperation on the possible formation of two joint ventures to produce nitrile butadiene rubber (NBR). If joint ventures are formed, the production facilities will be based in Krasnoyarsk, Russia, and Shanghai. According to the agreement, the NBR ­capacity of SIBUR's Krasnoyarsk rubber plant will be increased to 56,000 tonnes/year, and the new Shanghai facility will have a ­capacity of 50,000 tonnes/year. "SIBUR has advanced technologies for the production of the ­synthetic rubber, which in partnership with Sinopec will serve the growing needs of Chinese ­industry," SIBUR CEO Dmitry Konov said.

MIDDLE EAST & AFRICA

PETKIM TO USE MORE LPG FOR CRACKER EXPANSIONTurkish petrochemical company Petkim Petrokimya plans to use 10-15% liquefied petroleum gas (LPG) and 85-90% naphtha as feed for its cracker expansion, a senior company official said. "Currently we use 90% naphtha and 10% LPG, but we are looking to change the feed mix slightly," said Hayati Ozturk, managing director of Petkim. Petkim plans to double its cracker and downstream capacity by 2018, following the start-up of its new $5bn (€3.7bn) refinery by 2015. The 214,000 bbl/day refinery will ­provide the feedstocks for the ­petrochemicals expansion.

BIPC SWITCHES TO HDPE INJECTION PRODUCTIONIran's Bandar Imam Petrochemical Company (BIPC) switched the production at its 120,000 tonne/year high density polyethylene (HDPE) plant at Bandar Imam to injection output in early October, a source close to the company said. BIPC switched to producing injection-grade HDPE because the company is facing a technical problem in producing blow molding-grade material, the source said. The producer is ­running the unit at close to full capacity, the source added.

BORZOUYEH TO RESTART BENZENE UNIT IN OCTOBERIran's Borzouyeh Petrochemical is expected to restart production at its 430,000 tonne/year benzene unit around the end of October, following a shutdown on September 27 because of technical problems, sources close to the company said. The shutdown, which was expected to last two weeks, was extended by a further two weeks. After the shutdown, the company ­declared force majeure on its ­supplies of benzene, orthoxylene (OX) and paraxylene (PX), a ­second source went on to add.

CORRECTIONSIn the ICIS Top 100 Chemical Companies listing in the September 12, 2011 issue, reported US dollar figures for Spain-based Compania Espanola de Petroleos (CEPSA) were about 10% lower than they should be, due to an error in calculating the exchange rate. CEPSA's 2010 sales should have been $3.695bn, ranking it number 88, instead of number 90 in the listing.

On page 27 of the October 10 issue, we reported that Germany-based Bayer MaterialScience (BMS) expects its new 300,000 tonne/year toluene di-isocyanate (TDI) plant in Dormagen, Germany, to be mechanically complete by 2014, with start-up expected at the end of 2014 or the beginning of 2015. In fact, BMS expects the plant to be mechanically complete by October 2013, with ­start-up in January 2014.